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 Senate Confirms Price to Lead HHS; Medicaid and ACA Reforms Stir

By a 52-47 party-line vote in the early hours of Feb. 10, the Senate confirmed Rep. Tom Price (R-Ga.) as Health and Human Services (HHS) secretary, overcoming objections by Democrats about the ethics of his stock dealings in health care companies while a member of Congress.
Republicans praised Price as an excellent choice to run HHS at a time the Trump administration is weighing radical changes to the country’s health care system, transitioning from President Obama’s Affordable Care Act (ACA) to something new, and not-yet-defined.
Claire McCaskill (D-Mo.) did not vote, making for the uneven tally.
Price, an orthopedic surgeon by trade, also raised the hackles of Democrats who said dismantling the ACA, especially without a Republican replacement plan, would leave up to 30 million Americans without health insurance. These people had gained coverage under the ACA’s expansion of eligibility standards for the Medicaid program and individual market exchanges.
But, Republicans said with Price now confirmed, an ACA replacement strategy and other reforms like block-granting or capping federal spending on Medicaid would accelerate. The priorities, they said, would be to put patients first and eliminate inefficiencies and fraud from the system, often times by providing states more control over the health care spend.
Ahead of the Price vote, and again in seeking to address what Republicans see as inefficiencies in the Medicaid program, the House Energy and Commerce Committee’s Health Subcommittee on Feb. 7 approved two pieces of Republican-authored legislation.
One bill (HR 829, the Prioritizing the Most Vulnerable Over Lottery Winners Act of 2017) would tighten Medicaid’s eligibility rules by mandating that states consider lottery winnings and other lump-sum payments of more than $80,000 when deciding if someone is eligible for Medicaid.
The second bill (HR 181, the Close Annuity Loopholes in Medicaid Act) would revise the rules for determining income for married couples when to gauge if one spouse or the other qualifies for Medicaid long term care benefits.
Continuing a theme set over the first three weeks of the Trump administration, Democrats have stressed that the changes favored by Republicans, beyond the minor pieces of legislation like those passed on Feb. 7, will do harm to Medicaid recipients, from children to those in long term care, like skilled nursing care centers. Democrats are specifically focused on the administration’s avowed goal to block grant, or set caps on federal funds for states to use on Medicaid.
Adding to the debate, on Feb. 6 Washington, D.C.-based consultants Avalere Health released new analysis that found that Medicaid block grants would shrink federal spending on the program by $150 billion over a five-year period, and per capita caps would reduce funds by $110 billion over the same time frame.
But the report showed the state-by-state picture much more cloudy as spending varies widely due to existing eligibility levels and spending per enrollee. As an example, Avalere said under Medicaid block grants, North Dakota would experience an increase in federal outlays but the other remaining states and Washington, D.C., would have their funding cut between a slight 4 percent to a sharp 62 percent. If per capita caps were implemented, 24 states would get more federal money and 26 states would see cuts, the report said.
“The details of how lawmakers structure a potential Medicaid funding cap (e.g., growth rates, allowances for historical spending and mechanisms for quality payments) will have a significant impact on states,” the report said. “For instance, states that spend more per enrollee will fare worse under per capita caps. States that experience large increases in enrollment will struggle in a block grant scenario.” 
Caroline Pearson, senior vice president for Avalere, says if these new funding mechanisms are enacted and states lose out on money without making up for new shortfalls on their own, then long term care providers could be faced with scores of new elderly Medicaid recipients falling under the uncompensated care category.
“If there are caps in federal Medicaid spending, some states could make up funding to preserve what they have now, or they could scale down services but keep eligibility standards the same by offering skinnier benefit packages,” she says.
Separate from the block grant and/or cap debate is what happens to those who obtained Medicaid benefits under the ACA’s expanded eligibility standards. Pearson says she could see lawmakers maintain the ACA expansion because governors, many of them Republican, do not want to dump millions of people off coverage. At the same time, to assuage political concerns, Congress could at the same time approve block grants and caps to keep President Trump’s promise on the issue.
There is also a chance states could carve out funding for long term care in order to avoid uncompensated care problems. “Long terms care is a reasonable carve out if the states do not have a lot of options,” Pearson says. But, with spending on elderly Medicaid recipients a significant portion of state budgets, a carve out could work against the stated goal of Republicans to control Medicaid spending.
In a separate congressional development, the Senate Finance Committee has announced that Seema Verna, selected by President Trump to run the Centers for Medicare & Medicaid Services, will have a confirmation hearing on Feb. 16. It is almost certain that Verna’s work on reforming the state of Indiana’s Medicaid program—which Price has called a model of how states could reshape health coverage for low-income, able-bodied adults—will be under the microscope during the session.
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